When your business begins hiring internationally, the question of how to pay employees abroad becomes more than a payroll issue, it becomes a compliance puzzle. And nowhere is that puzzle more intricate than in the Gulf Cooperation Council (GCC).
Between local wage protection systems, visa sponsorship laws, and fast-changing employment regulations, paying people in the GCC requires more than just good intentions, it requires local infrastructure.
In this article, we’ll unpack how companies can compliantly pay international employees across the GCC, why the rules are so complex, and how an Employer of Record (EOR) like Auxilium helps businesses simplify the process across six countries, the UAE, Saudi Arabia, Kuwait, Oman, Bahrain, and Qatar.
The Compliance Reality of Paying People in the GCC
Paying employees in the GCC is not as simple as sending money from your HQ. Each country requires salaries to move through local banking rails, tied to government-monitored systems known as Wage Protection Systems (WPS).
These systems track whether salaries are paid on time and in full, and whether the employment is linked to a valid work visa. If even one step is skipped, say, paying from an overseas account, regulators can flag violations, freeze business services, or block visa renewals.
And because rules differ between countries, and sometimes even between free zones and mainland authorities within the same country, keeping pace with what’s required can feel like running six different companies at once.
That’s why many fast-growing businesses choose to work through an EOR: a local partner already wired into each country’s compliance framework.
Understanding the Payroll Frameworks that Govern GCC Employment
Let’s take a closer look at the systems that shape how international employees must be paid in the Gulf. Each country has its own structure, and the penalties for missteps can be steep.
In the UAE, the Ministry of Human Resources and Emiratisation (MOHRE) mandates WPS for all private-sector companies. Even free zones like DMCC introduced mandatory WPS from early 2024. The UAE also modernised its end-of-service (EOS) rules, introducing a voluntary savings-based benefits scheme that allows companies to invest EOS contributions, giving employees better long-term returns and employers predictable costs.
Saudi Arabia takes a similarly strict approach. Its MHRSD monitors salary payments through the Mudad platform, where employers now have just 30 days to upload payroll files. Miss the window, and the system automatically flags a violation.
Oman strengthened its WPS in 2024, Bahrain rolled out an enhanced system tied to its labour authority (LMRA), and Qatar continues to enforce WPS as part of its broader labour reforms. Even Kuwait has adopted similar controls, linking payroll proofs to visa renewals.
These rules are not static, they evolve almost every quarter. Keeping up is not just about reading the latest circulars; it’s about having the right local processes in place. That’s exactly where an EOR fits in.
The Employer of Record: Your Local Compliance Partner
An Employer of Record (EOR) acts as the official employer for your international staff. They handle contracts, sponsorship, payroll, and all the government-facing processes that keep you compliant.
Think of it as a “plug-in compliance engine” — your company directs the work, while the EOR ensures every payment, visa, and end-of-service calculation aligns with local law.
For instance, if you hire an engineer in Saudi Arabia, Auxilium processes their salary through the Mudad system, ensuring it meets the new 30-day upload rule. If you onboard a project manager in the UAE, we run payroll through WPS, enroll them in ILOE (the unemployment insurance scheme), and manage their EOS — whether traditional gratuity or the newer savings scheme.
The benefit? Your team stays focused on growth, not government paperwork.
Common Cross-Border Payroll Challenges (and How EOR Solves Them)
Every company entering the GCC encounters similar pain points — and they all come back to compliance.
1. Opening local entities and bank accounts
Without a local entity, you can’t access WPS or pay through local banks. Setting this up can take months. An EOR like Auxilium already operates fully compliant entities and can onboard your people immediately.
2. Visa sponsorship and work authorisations
Each salary payment in the GCC must tie back to a valid visa and labour contract. EORs sponsor your employees legally, removing the need for your business to navigate complex immigration systems.
3. Free-zone and mainland differences
In the UAE, the rules for DIFC, ADGM, or DMCC differ from federal MOHRE laws. An EOR understands these nuances and ensures contracts, payroll, and benefits align to the correct jurisdiction.
4. End-of-service obligations
EOS payments are a legal right across the GCC. Whether you’re managing gratuity or new savings-based schemes, an EOR calculates and funds these correctly — protecting both employer and employee.
5. Ever-changing labour reforms
With each new circular or ministerial decree, compliance standards shift. An EOR’s on-the-ground team ensures your payroll adapts automatically — no scrambling to interpret new laws.
How to Pay International Employees in the GCC (Step-by-Step)
Here’s what the process looks like when managed by an EOR like Auxilium.
- Determine the right employment framework — Is your hire under mainland law (like MOHRE in the UAE) or a free-zone authority (such as DIFC or ADGM)? This decision affects everything from payroll timing to end-of-service rules.
- Onboard legally — The EOR issues compliant contracts, secures work visas, and registers the employee with local authorities.
- Prepare payroll inputs — Define basic salary, allowances, and benefits. Certain jurisdictions, like ADGM, require basic pay to be at least 50% of total compensation.
- Register for mandatory contributions — From unemployment insurance in the UAE to pension schemes in Bahrain, EORs manage all local deductions and filings.
- Run payroll locally through WPS — Salaries are paid via local bank rails, with files uploaded to systems like Mudad, MOHRE, or LMRA — all within legal timelines.
- Manage end-of-service benefits — Choose between gratuity or savings-based models (where available) and ensure correct accruals.
- Maintain full audit trails — The EOR provides proof of every submission, making audits and renewals stress-free.
Each step is built to satisfy regulators — and protect you from penalties, delays, or reputation risks.
Country-by-Country Highlights
Each GCC nation shares the same goal, protecting workers’ rights and ensuring salary transparency, but the route there differs.
- United Arab Emirates: Enforces WPS across both mainland and free zones. EOS can be paid as gratuity or via regulated savings schemes. DIFC’s DEWS plan and ADGM’s 2024 employment reforms are examples of how the UAE continues to evolve.
- Saudi Arabia: Runs the region’s most digitised system, Mudad, with strict reporting windows and real-time compliance tracking.
- Oman: Introduced new WPS regulations in 2024, expanding employer coverage and banking requirements.
- Bahrain: Rolled out WPS version 2 and tied EOS for foreign workers into the GOSI pension system, bringing greater transparency.
- Qatar: Links WPS with national labour reforms and minimum-wage enforcement.
- Kuwait: Operates under similar payroll verification frameworks via the Public Authority for Manpower (PAM).
For companies hiring in multiple GCC countries, these differences can easily turn into bottlenecks. Auxilium bridges those gaps through one integrated process.
Proof in Practice: How Businesses Simplify with EOR
Over the past two decades, Auxilium has supported hundreds of international employers through exactly these challenges.
- A global data infrastructure firm needed to deploy engineers across Saudi Arabia, Bahrain, and the UAE — fast. With no local entities, Auxilium onboarded staff through its EOR, ensuring full WPS compliance and uninterrupted visa processing.
- A sustainability consultancy scaling in Saudi Arabia faced pressure to maintain green Nitaqat status. Auxilium restructured their workforce mix, protecting quotas while maintaining project delivery.
- A software company expanding into Kuwait discovered its inherited payroll was non-compliant. Within three weeks, all 27 employees were migrated under Auxilium’s EOR model — avoiding fines and ensuring seamless continuity.
Each of these examples underscores one truth: local expertise is the difference between smooth expansion and stalled operations.
Owning an Entity vs. Using an EOR
There’s no one-size-fits-all solution, but the differences are clear.
Setting up your own entity gives you direct control and brand presence — but it takes time, investment, and an ongoing commitment to regulatory maintenance. You’ll need to open local bank accounts, test WPS files, register for visas, manage localisation quotas, and keep pace with constant policy updates.
By contrast, an EOR gives you immediacy. You can hire, pay, and manage employees across six GCC countries through a single, compliant platform. You still direct day-to-day work, but Auxilium carries the legal and administrative responsibility — from payroll and visas to end-of-service benefits.
Expansion into the GCC is a growth opportunity, but also a regulatory maze. Each country has its own portals, timelines, and obligations. Missing one step can lead to fines or frozen operations.
Auxilium simplifies that. With local entities and teams across all six GCC nations, we act as your embedded compliance partner — managing payroll, visas, and benefits under one coordinated framework.
The result? Your people get paid on time, your business stays compliant, and you focus on what really matters, building your presence in one of the world’s most dynamic regions.
If your business is expanding into the UAE, Saudi Arabia, Kuwait, Oman, Bahrain, or Qatar, Auxilium can help you hire and pay international employees the right way — through local payroll, visa sponsorship, and compliant end-of-service management.
Our EOR solutions handle the red tape so you can focus on growth. Let’s start with the country that matters most to you, and build from there.
